MELBOURNE, Australia (Radio Australia, Nov. 7, 2012) – The island territory of Tokelau has become the world's first place to run entirely on solar power.

The islands - home to about 1,500 people - recently switched on the third and final installment of its energy grid last week, which was built with the help of an AU$7 million [US$7.3 million] grant from New Zealand.

The new system saves Tokelau from importing all its energy as diesel, which used to cost up to AU$1 million [US$1.04] each year.

Dean Parchomchuck, the director of the company which installed the new grid, Powersmart Solar, told

Pacific Beat Tokelau residents have only benefited from the switch over.

"We've put in nearly a megawatt of solar in total, 4,000 solar panels in total," he said.

"There were lots of power cuts with the diesel generators, now their system is far more reliable and they experience far fewer power cuts."

Each of Tokelau's three island atolls has its own power grid as he says it would be unfeasible to share one due to the distance between the islands.

Batteries have also been installed in the new systems to provide power during the night.

The islanders have been trained in how to operate and maintain the new system but Powersmart Solar will continue to monitor the system remotely for the time being.

Mr. Parchomchuck says other Pacific Islands have expressed interest in making the switch to solar power after the success in Tokelau.

"There seems to be a buzz around," he said. "A lot of these other countries seem to have a goal to replace at least a portion of diesel generation to try and clean things up."

But he says unless the islands were of a similar size or smaller than Tokelau, it would be difficult to entirely replace diesel generators with solar power.

"Tokelau is quite unique, because of the size of it that we were able to completely replace the diesel generators all together," he said

"Many of the other Pacific islands are larger, they have larger power usage so what we do there is supplement power similar to Tonga, and just offset diesel usage."